Investment Real Estate Sales Jump by Nearly 50 Percent in Upper Manhattan

EAST HARLEM — The $39 million sale of the Pathmark on 125th Street and Lexington Avenue contributed to a 49 percent surge in Upper Manhattan’s investment real estate sales last year — with East Harlem and Washington Heights leading the way, according to a report released by Ariel Property.

In 2014, sales of 584 properties — including multi-family apartments, industrial and commercial spaces — totaled $3.22 billion. That was an increase from last year’s $2.17 billion, according to the report that tracks sales of more than $850,000.

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“In some ways Upper Manhattan is seeing exceptional levels of development that haven’t been seen since 2006, 2007,” said Michael Tortorici, vice president of Ariel Property Advisors. “For a couple of years things were stagnant. Now you are seeing the pendulum swing in the other direction.”

According to the report, most of the money was invested in East Harlem, which accounted for 45 percent of the dollar volume last year. Washington Heights was second with 23 percent, and Central Harlem was third with 19 percent.

Tortorici expects the growth to carry on as the economy continues to recover. Real estate markets in Queens and Brooklyn have experienced similar growth, he added.

Investors are attracted to Upper Manhattan because of its arts scene, access to public parks, transportation options and its proximity to Midtown, he said.

Some of the biggest growth came in multi-family properties, which hit new highs last year, according to the report.

The average price per unit rose to $237,865, and the average price per square foot was $266, both record highs.

“What it tells you is that multi-family assets are seen as a safe bet for investors, because as long as people want to live in the city, they will need places to rent apartments,” Tortorici said.

The largest deal uptown was the $1.04 billion sale of the Urban American East Harlem Multifamily Portfolio, which consists of 4,000 apartments in East Harlem and Roosevelt Island.

One area that didn’t see a lot of growth last year was development activity. But that has more to do with lack of supply than a decrease in demand, according to the report.

The average price per buildable square foot rose 10 percent to $131, with several sites exceeding $200 per buildable square foot. That price point has typically been reserved for sites with unique retail components or prime locations in historic districts or with park views, according to the report. [DNA]

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